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Why life insurance could be important in a divorce

One issue North Carolina couples who are divorcing may need to deal with is ensuring that there is sufficient life insurance in place. This may seem like a technicality, particularly for younger people, but an unexpected death can happen at any age, and it can significantly affect agreements regarding property division, alimony and child support.

For example, a person who is receiving alimony for 15 years might calculate how much that would be in total. The person paying alimony could then ensure that there is enough life insurance to cover this sum. The same might be done for child support. Parents should also take into account what college might cost and how much each parent would have contributed to college. It is important to keep in mind that there will be more expenses besides just room, board and tuition. The child will continue to have the same existing expenses as well.

There could be additional complications. For example, one parent’s term life insurance, paid at reasonable premiums, might come to an end before the period of child and spousal support does. The new premiums might be significantly more expensive. Another complication could arise if one person is not insurable. In the latter case, directing retirement survivorship benefits to an ex-spouse and children or purchasing an annuity could be solutions.

People may also want to consider what to do about health insurance. Often a person is carried on a spouse’s policy, and this may need to be changed. Updating estate plans, including beneficiary designation, is also often overlooked as part of a divorce. An attorney may be able to help an individual identify and take care of these issues. Ensuring financial stability is an important element of the process since a divorce may lead to a lower standard of living overall.

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